Page:Federal Reporter, 1st Series, Volume 4.djvu/889

 IN BE DEXTEBTILLE UANUP'd & BOOM CO. 875 �bility sought to be enforced in the present proceeding arose from such operation of the road and as an incident thereto ; that, therefore, it may be put under the head of operating expenses, and so acquire rank as a claim having equities enforceable against the net earnings of the road in the hands of the receiver. There is some plausibility in the argument, but it is unsound. No relation of principal and agent, either in law or equity, can be implied from the mere fact that the railroad company continued to operate the road after it was in default in payment of the mortgage debt, nor from the fur- ther fact that the bondholders did not take possession of the property after suoh default, nor from both facts combined. The mortgages gave to the mortgageea the right to take pos- session after default, but they were not obliged to do so, nor was it necessary that they should take possession in order to avoid such a liability as is here claimed. The railroad com- pany was operating the road when the alleged loss and dam- age occurred. The negligence of the company, if there was negligence at ail, occasioned the loss. For that negligence it alone was responsible. To sustain the position taken by the petitioners, it must be held that the bondholders at least impliedly assumed liability for the negligence of the railroad company, and that by operation of law their mortgage eecur- ity was subordinated to claims of the cha,racter of these. I cannot so hold. The alleged causes of action acerued after the company had given mortgages upon ail its property, which were then subsisting liens, and before the receiver was ap- pointed. It can make no difference that they acerued after the company was in default in payment of interest on its bonds. The road was still being operated by the company, and whatever liability existed must have been one against the company alone. In no just or proper sense could such claims as these be considered as part of the operating expenses upon which the petitioners could assert a right prior to that of the mortgagees. They are wholly uhlike claims for supplies, new equipment, right of way, and new construction, or any claim falling legitimately under the head of operating expenses, which the courts sometimes order paid from net earnings in ����